CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 72 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 72
Topic #: 1

A good has a price elasticity of supply of 0.8. Which of the following best describes the effects of a rise in demand for this good?

1. More will be spent on the good

2. More of the good will be made and sold

3. Producer incomes will rise

4. Price rises more than proportionately to the rise in quantity produced

A1 & 2 only

B1 & 3 only

C1 & 4 only

D1, 2, 3 & 4

Show Suggested Answer

Suggested Answer: A

by Carey at Jul 25, 2023, 06:25 AM

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Emeline

9 days ago

I'm not sure, but I think the answer is A) 1 & 2 only.

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Amber

11 days ago

I disagree, I believe the answer is D) 1, 2, 3 & 4.

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Hmm, I'm not sure. 0.8 elasticity means supply is somewhat responsive to price changes. I guess C could be right, but I'm not convinced that producer incomes will necessarily rise. Guess I better brush up on my economics before the exam.

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Leonardo

17 days ago

I think the answer is C) 1 & 4 only.

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Maxima

18 days ago

Well, this seems straightforward. With a price elasticity of supply of 0.8, I'd say option C is the correct answer. Price will rise more than proportionately, and more will be spent on the good. Sounds like a win-win for the producers!

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Francis

5 days ago

I think you're right, option C makes sense. The price will definitely rise more than proportionately.

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CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 72 Discussion

Contribute your Thoughts:

Emeline

Amber

Reuben

Leonardo

Maxima

Francis